In the second in a small collection of interviews with innovative entrepreneurs and thought leaders to be published throughout the year, here WhichPLM discusses consumer behaviour, the Internet of Things, and identification technology with Certilogo’s Founder & CEO, Michele Casucci. Certilogo is the world’s leading Brand Authentication Platform, empowering brands and their customers to take down the global counterfeiting industry.
Name: Michele Casucci
Occupation: Founder & CEO, Certilogo
Likes: Innovation, courage, ethical behavior & care
Dislikes: Superstition, cynicism & negativity
Words to live by: From the Greek, “γνῶθι σεαυτόν”: Know yourself.
WhichPLM: Michele, you’re the Founder & CEO of Certilogo, which is, in the simplest of terms, an authenticator of product. For the purposes of this discussion, could you begin today by giving our readers an overview of the company, and what it is you offer your clients?
Michele Casucci: Sure. We are operating in a subset of the ‘Internet of Things’, if you like. What we are doing is ‘information enabling’ the products that are manufactured by our clients. Today we work with about 60 brands – mostly in the fashion and apparel space but not exclusively – and what we do for these brands is tag their products with a unique, item-level identification code, which can be expressed in several ways. We’re flexible as far as the tagging methodology and the identification technology is concerned. So it can be expressed in:
- A human-readable form
- A machine-readable form – for example, a quick response code
- An RFID tag
- An NFC tag, and so on and so forth.
Each of these unique, item-level codes – which are generated by a randomized algorithm – is associated with a specific set of supply chain information that we get from the client’s ERP system. This information can be more or less detailed according to the needs of the client. In some cases we might have more information, in some cases we might have less information, but typically we get information such as: (of course) what the product is, but also who manufactured the product, when the product was manufactured, when the product left the warehouse, to which retailer or wholesaler the product was sold, and a number of other information.
So that’s step one.
Step two is that these codes are placed usually on a product’s label, and this label contains a ‘call to action’ explaining that you can check the authenticity of the product by connecting with Certilogo from your desktop or smartphone.
Once the consumer does that – and so far we’ve had more than 1.5 million consumer authentications from more than 170 countries all over the world – you are prompted to register with us. You can do that with Facebook or Google Plus, and we ask permission to use your data and location. Then, during the authentication process we ask you to specify your situation: if you already purchased the product or you’re in the store now; and where you found the product, down to the retailer.
That information goes to our platform, where our authentication engine evaluates it and returns a real-time response to the user—authentic or fake—and to the brand, in the form of alerts and analytics.
The analytics you get from involving consumers are like nothing else in the industry. First, we have detailed supply chain data about the product being authenticated and where it is sold. Second, we have data that comes from each consumer: his profile, who he is, how old he is, which city he lives in. Combining these sets of information creates valuable visibility in three main areas:
- Fraud detection
- Market distribution and supply-chain-related security issues
- CRM, marketing profiling, and engagement opportunities for the consumer.
As you may have guessed already with that last point, once the authentication is terminated, there is further opportunity for engagement. You can prompt the consumer to sign up to an engagement programme; you can refer him to a website; you can suggest new products and a number of other marketing activities.
WhichPLM: You have a very strong indicator of consumer behaviour there, because you’ve got anyone who’s passionate enough about a brand to bother authenticating it (to put it in simple terms). You’re sure that they’re aligned with that brand’s values so, in a way, you have a captive customer already. So it’s a very good platform to launch that kind of engagement activity from.
Michele Casucci: You’ve nailed it. The quality of this contact is extremely high. In most cases when the authentication takes place the product is physically in the hands of the consumer.
You mentioned about the ‘bother’ of authenticating it. It’s a very easy process, but you’re right: why is the consumer making this effort? Just because he is attached to the brand, he loves the brand? Yes, but not only that. He also wants proof that the product he’s bought is the real thing, that he hasn’t been inadvertently tricked into buying a fake.
There is a need for that security today in a way that there wasn’t 10 or 15 years ago, before the advent of e-commerce. The majority of counterfeit products today – especially in the apparel and luxury space – are not the obvious fakes sold in street markets to consumers who are fully aware of their inauthenticity. They’re ‘deceptive fakes’, if you like –near-replicas, in many cases produced by dishonest suppliers, and then sold online from professional-looking websites using the brand’s images, with prices that are slightly discounted from the real thing – a ‘one day sale’ type of opportunity.
This is why this phenomenon is really hurting brands. These are your consumers who like to buy your products, and are presumably looking for ways to save a little money, which the Internet has accustomed us to do—using ‘30% off’ deals for example—without the worry of the product being fake.
So there is an increasing need for consumers who love a brand but who are not buying from the official website or the brand’s physical store to actually be sure that they are buying the authentic product.
WhichPLM: You’ve said you operate in a ‘subset of the IoT’. You don’t pitch yourselves using the acronym, understandably, as it can relate to so many things and, as we saw when researching our 6th Edition, there’s still the issue of clarity around what the term actually means. But we feel that in a way, you’re a very neat encapsulation of what the Internet of Things is actually about because where Certilogo sits is at the intersection between a smart device (somebody’s smartphone, tablet, or laptop for example) and what we’ll call a passive, or ‘dumb’ device.
Michele Casucci: I completely agree. We do see ourselves as an ‘Internet of Things’ company; I actually consider product authentication as one vertical of our platform.
WhichPLM: So which are the other verticals?
Michele Casucci: The others have not yet been launched into the market, and are still in development, but are going in the direction of further consumer engagement opportunities. Today, we’re mostly about products being authenticated by the consumer and, as a byproduct, marketing and engagement opportunities. You hit the nail on the head describing us at that ‘intersection’.
WhichPLM: In addition to the consumer-facing element, I’d like to come back to something you hinted at before. You’re able to see not just where something was sold, but also where it was made, and that’s a fairly significant component of any brand or retailer’s transparency strategy these days. Today, what transparency often means in our industry is making the best effort to run audits and being reasonably confident that product components came from a compliant factory in X country.
Having products that are geo-aware in that sense, and interpreting systems that can say where they’ve been, has the potential to really change the way we think about transparency. Can we get your opinion on what it means to be able to say, “we have a product and we can tell you exactly where it’s been since the components have been put together”? What does that mean for the transparency, corporate social responsibility equation?
Michele Casucci: Great question. There are two perspectives for looking at this, I think. One is the perspective of the consumer and the other is the perspective of the brand, of the manufacturer. As far as the manufacturer or the brand owner is concerned, being able to say where the product has come from is an opportunity to give the consumer access to its supply chain, making it evident to the consumer how the company is manufacturing products.
The information of where the product has been manufactured is also important for the brand to learn whether there is a mismatch, for example, in the market distribution. So, when you know that a product has been manufactured by contractor A and been sent to retailer B, but then the consumer says he’s purchased the product from retailer C, you know there is something going on in the distribution market. If just one consumer finds a product in an unexpected retailer, that’s one thing; it’s another when one thousand consumers are saying the same thing.
We can also look at the velocity at which this takes place. We know the time that a product has been sent to a specific retailer and we know the time at which a consumer authenticates the product. So we can infer any suspicious patterns of behaviour from certain retailers or certain wholesalers by looking at the time it takes for the product to actually show up in the hands of the consumer.
Coming back to your question on transparency. Our system allows the brand owner to know about any suspicious patterns popping up in their supply chain with reference to specific contractors. Let me explain to you what I mean by this. The heart of the authentication technology that we have is an artificial intelligence application.
WhichPLM: Sorry to jump in, but that’s one of the key things we wanted to talk about: machine learning.
Michele Casucci: That’s the heart of our platform. We have invested millions of Euros in the business, most of which went into the development of this artificial intelligence. This puts us in the position to know whether there are some anomalies going on with the codes and lots of other stuff that would take me half an hour just to list.
Our platform is able to detect whether you are cloning our codes – so if you take our codes and put them on hundreds of thousands of products and send them out, our platform will detect the codes as being cloned. That means we are not only in the position to tell the consumer that the product is a fake, but we can also find out who sold the fake product. In other words, we’re building the world’s biggest map of counterfeit products. And at the same time you can look at suspicious patterns of relationships between the codes being cloned and certain contractors / sub-contractors to which the original code was associated. In other words, we can point a brand owner in the right direction to address their fraud and of supply chain security issues.
Ultimately the whole idea of Certilogo is about much more than building the most sophisticated technological platform possible – about using the ‘superpowers’, as I call them, of the cloud in combination with platform technology and machine learning. The counterfeiting problem is so massive and so geographically distributed that it has traditionally been intractable. I saw the opportunity here to use the power of virtually millions of consumers and put them at the service of fighting counterfeits. If you look at the value that our platform creates for the brand, that value is co-created with the consumer who willingly shares his information. We add to that information from retailers, customs officers and so on, who all come together to share information. And as a result we can give back to each stakeholder a certain service: to brands we give analytics, to the consumer we give an authentication service, to the customs officers we give an inspection tool, and so on and so forth.
Airbnb and Facebook are examples of the same model – platforms where the value is co-created by each stakeholder’s participation and by the interaction between those stakeholders. It’s incredibly powerful.
WhichPLM: What do you see as the future of this? We’re saying that for the time being we’re talking about, primarily, authentication. You’ve hinted a lot at what can be done in terms of consumer engagement and semantic analysis algorithms and these kinds of things. Going back to Certilogo as an IoT company, as a forward-thinking platform, what do you see as the future of the Internet of Things in Fashion?
Michele Casucci: Authentication is a very concrete application, and it’s proven to be incredibly attractive to the consumer. In the future I would expect the digital capabilities of the product to be more extensive. So, I can imagine that it will easier for brands to establish a connection with the consumer by means of a specific product that will help to extend the share of wallet that you have with that particular consumer.
I would imagine things like recommendations for other specific products to be important – ‘this product you bought goes very well with this product’, for example. I also see value in registration of property of the product, perhaps more so in the luxury space. I can see being able to track the ownership and including the authenticity of a product further down the ownership chain as very important, especially using technologies that can help you photograph every step of the ownership chain.
Other obvious things like re-ordering products or giving some content that is specifically related to product or product lines, like video. Running away with my fantasy here I think that once you have a digital identity of a product you can use that as a launch pad for virtual reality.
WhichPLM: That isn’t as crazy a fantasy as you might think. We’re seeing a lot of people moving in that direction.
Michele Casucci: I think in general what’s going on in the world is that platforms have emerged as a consequence of exponential technologies like network computing systems and artificial intelligence really coming to be full-blown in their power. It has become possible to do things now that were impossible to do before, and you don’t need to be a 2,000-person-strong company to make a difference. Look at us: we are enabling a collaborative effort between virtually millions of people. We can do it because of platform technology and because there are two billion people with a smartphone in their pocket that is more powerful than the supercomputers of 20 years ago. I think we haven’t seen anything yet, compared to what will come in the future.